Indian power company NHPC prices IPO at top to raise $1.25 billion

Hydroelectric power company NHPC has raised Rs58 billion ($1.25 billion) ahead of its forthcoming listing on Indian exchanges, according to a source close to the deal. The state-owned company will use the money to partly finance the construction of new power plants.

The 1.6 billion shares on offer were priced at Rs36 each, the top of an indicative range that started at Rs30, said the source. The offering represents 13.6% of the outstanding post issue shares, with the rest remaining in the hands of the government.

The top-end pricing was possible due to the strong demand for all the available tranches. The tranche allocated for qualified institutional buyers (QIB) was 29.1 times covered, while the portion reserved for non-institutional investors -- such as corporates and high-net-worth individuals -- was 56 times covered. The shares for retail investors were 3.8 times covered. The only part of the deal that was not fully covered was the employee share tranche, which was only 0.56 times covered. Overall, the deal was 23.61 times covered.

This is the second Indian initial public offering of size so far this year, and in terms of demand, it trumps the other power company, Adani Power, which priced its IPO just two weeks ago. The $625 million Adani Power deal closed 21.6 times covered.